National News

Water bills set to rise by 2%

Annual water and sewerage bills are to rise by an average of 2% - £8 - from April, industry body Water UK said today.

Most firms are increasing prices by less than the rate of inflation though the biggest company, Thames Water, will impose a 3.4% hike.

The changes for 2014/15 are within parameters fixed by regulator Ofwat in 2009 to cover a five-year period.

The companies submitted their plans for the 2015-20 period in December and Ofwat will announce its verdict on them later this year.

Thames, which serves 14 million customers in and around London, had asked the regulator to be able to impose a one-off £29 bill hike for 2014/15 but the request was turned down.

Instead its customers will see combined water and sewerage bills rise by about £12 to an average of £370. It pointed out that this was still the third lowest among the ten major firms.

Thames wants to raise bills by more than 10% over the cost of inflation for 2015-20. But nine other major firms said they would cut bills or leave them flat in real terms, after Ofwat asked them to consider scaling back increases amid an income squeeze on consumers.

For 2014/15, the average increase across the sector of 2% is below last November's figure of retail prices index (RPI) inflation used by the industry, which was 2.7%.

Pamela Taylor, chief executive of Water UK said: "Water companies are in touch with their customers and have made significant efforts to keep customers' bills as low as possible.

"At the same time, companies will invest around £5 billion in the next 12 months to ensure our drinking water quality will remain amongst the best in the world and our rivers and beaches become even cleaner.

"This investment also maintains well over 120,000 jobs in the UK and helps support regional economies.

"Companies will also continue to allocate millions of pounds to give struggling households money off their water bills as well as offering a range of extra support and advice measures."

Ofwat said its call for companies not to take up their full allowed increases this year helped secure a better deal for customers.

Chief executive Cathryn Ross said: "It's our job to make sure customers are getting a fair deal. We know that customers are having a tough time.

"In the last five years bills have risen with inflation, yet we are well aware customers' incomes haven't.

"We are pleased that a number of companies have heard our call, listened to their customers, and taken action. Ten million households will now benefit from lower-than-expected bills this April.

"We are now focused on getting the best deal for customers over the next five years."